Bloomberg News

China Cuts Prices for Cancer, Immune, Blood System Drugs

September 17, 2012

China cut the maximum retail prices for some cancer, immune and blood system drugs by an average of 17 percent, the country’s top planning agency said.

“Oncology, immune and blood system drugs are costly and have a greater impact on patients, so lowering their prices can effectively reduce the burden” on patients, the National Development and Reform Commission said in a statement posted on its website today.

The price cuts, effective October 8, comes as China seeks to rein in the rising cost of health care for its aging population. Policy makers are also expanding national health insurance coverage to include more major diseases, and adding to its list of essential drugs, for which prices are controlled by the government, Health Minister Chen Zhu said yesterday.

“This latest move was in-line with past drug price cuts of about 18 and 19 percent, so the market would see this as quite reasonable,” said Gideon Lo, an analyst with Nomura Holdings Inc. in Hong Kong. China has cut the price of drugs five times since 2009, and more than 20 times since 2000, Lo said in a telephone interview.

The latest round of price cuts, which affects 95 variety of medicines and more than 200 formulations, will be applied mainly on drugs with “high daily costs”, and includes patented and innovative medicines, the NDRC said. Lower cost drugs were not affected.

Blood products for which hospitals face a shortage of supply had their prices raised to encourage production, according to the statement.

“Companies that have products that are focused on these specific therapies could see an impact to their prices,” Lo said. Companies that may be affected include Jiangsu Hengrui Medicine Co. (600276), which focuses on oncology drugs, Hong Kong-based Lansen Pharmaceutical Holdings Ltd. (503), which makes immune system drugs, and Hainan-based Sihuan Pharmaceutical Holdings Group Ltd. (460), which makes both oncology and blood system medicines.

To contact Bloomberg News staff for this story: Daryl Loo in Beijing at dloo7@bloomberg.net

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net


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